These potentially influential elements on the FFE refer to aspects related to the type of company.
1. Company size
Size is a factor that can influence the determination of the most appropriate factors to use in the FFE, given that a higher level of resources can make the FFE process more bureaucratic and slower. We shall now summarise the main research carried out in this field:
87
Table 2.13 Main studies into the FFE in relation to company size
Study Main inputs
Deppe et al. (2002)
Companies play a different role in FFE aspects depending on their size:
• Large: organisational aspects
• SMEs: human aspects (e.g. culture of respect)
Verworn (2002)
There seems to be a moderating influence on the size of the company and the degree of innovation in the FFE.
• Large companies: seem to have a more systematic FFE process and use more methods and tools.
• SMEs: given limited resources, tend not to continue looking for new product ideas.
Poskela et al. (2005) and Poskela (2007)
The size of the company partially moderates the relationship between the integration of FFE challenges and the way the strategy is implemented.
Source: Own elaboration
2. Company age
Murphy et al. (1996) stress that the age of each company is related to its culture. Hence, as these authors point out, in older companies, there is a common purpose in development goals, while younger companies have a wider variety of goals. Likewise, there is a different perception of the role of the marketing department in the FFE according to the age of the company.
88
3. Geographical location of company operations
This factor may have an influence on the FFE process, several authors say (Fabrizio, 2009; Cristiano et al. 2000). For example, Fabrizio (2009) suggests that the use of an open innovation strategy is influenced by the geographical location of the company. Meanwhile, Cristiano et al. (2000) find differences in management support, multi-functional participation and the use of the QFD business technique (see Annex 5) between different countries.
4. Capital structure
De Cleyn (2009) states that academic spin-offs can provide significant added value for transferring the results of their research to new products. In particular, their value is greater if the marketing aspects are not very relevant, given their reduced experience in this area. In other situations, other marketing models (e.g. portfolio of companies) may be more appropriate.
5. Intensity of R&D
Murphy et al. (1996) emphasise that the intensity of R&D can predict the activities carried out in the FFE. In this aspect, these authors point out that R&D-intensive companies emphasise the creativity and role of their employees in the generation of ideas. Likewise, in the evaluation of ideas, priority is given to their quality and not the source of their generation.
6. Industry
The industry and context in which the company operates is, according to previous research, a determining factor in the type of process followed in the FFE and the importance of the different strategies to be used. In this area, Chang (2012) suggests that the effect of customer participation on market adoption of the new innovation varies across industries.
89
Table 2.14 Types of knowledge in different industries
Synthetic knowledge base Traditional industries
Analytical knowledge base Knowledge-based industries (e.g.
biotechnology, IT, etc.) New application or combination of existing
knowledge
Innovation through the creation of new knowledge
Importance of applied knowledge (problem- linked), often through inductive processes
Importance of scientific knowledge, often based on deductive processes and formal models
Interactive learning with customers and suppliers
Collaboration in research between companies (R&D departments) and research organisations
Command of tacit knowledge and practical skills (due to being the most specific type of know-how)
Command of codified knowledge (due to being recorded in patents and publications)
Mainly incremental innovation Mainly radical innovation Source: Own elaboration based on Asheim and Coenen (2006)
In this aspect, in the section of this doctoral thesis 2.4 ("Key elements of the FFE") we have identified different models of FFE management developed by the previous literature in sectors such as eco-innovation (Eleiche, 2010), nanotechnology (Oliveira et al., 2010; Heubach et al., 2010), defense (Hughes, 2010; Keat, 2011), tourism (Dalton et al., 2009) and medical technology (Hummel, 2001). In this sense, the sectoral differences in the FFE are derived fundamentally from the different types of knowledge used in the different sectors (Asheim and Coenen, 2006).
In addition to the sectorial models mentioned in Table 2.6 above, "Methodologies developed to manage the FFE ", other authors have attempted to identify the distinctive features of each industry's FFE without further
90
exploring the development of an FFE management model in that particular industry. Next, we will summarise the most relevant research that has set out to identify the different characteristics of the FFE of each industry, despite the lack of an industry-specific management model, as for example in the case of Biedenbach (2011) and Alojairi (2011) in the pharmaceutical industry.
On this note, the aforementioned researches conducted by Biedenbach (2011) and Alojairi (2011) analysed management of the FFE in the pharmaceutical industry:
• Multi-project skills, which are crucial for innovation, may jeopardise certain specific projects
• Dynamic skills play a key role in the FFE, with this importance being perceived in activities related to business intelligence
• The majority of network relationships in the project are asymmetric, with a significant discrepancy in the perceptions between the interrelated nodes of the network
Aagaard et al. (2011) identify the key factors to support radical innovation in the pharmaceutical industry, sorting these factors in order of importance:
• Strengthening employee training to learn and explore • Exploratory and failure-tolerant team culture
• Sharing objective knowledge and collaboration with external partners • Collaboration and efficient sharing of multi-functional and multi-
disciplinary knowledge
• FFE as a flexible learning process
91
Likewise, the FFE has been analysed in detail in the nano-microsystems industry (Burger 2011; Burger et al. 2013: Burger et al. 2010):
• Highly complex industry focussed on the long term
• R&D in this industry is fundamentally an "exchange of ideas" with many uncertainties instead of a clearly-structured process
• Interdisciplinary, as expertise from different disciplines plays a role • The most critical aspects for the project team in this industry are
knowledge construction and skills in manufacturing and integrating systems. This is due to the fact that both aspects cover multiple scientific and engineering disciplines, so learning capacities are paramount in the project
• The creation process (by the know-how team) and skills are more important than the existence of a specific process.
• The team's experience in long-term developments (from 5 to 10 years) should enable a rapid response to changes in the market and technology.
• The uncertainties of the FFE project can be reduced through the early diffusion of a technology vision by means of "market contrast" and technology adoption.
• Leadership in this industry lays the foundations for technological developments by creating a culture of "innovation and failure" both on a company-wide and a project level.
• The team structure and leadership style have to be adapted to the complexity of the project and the technology. Therefore, the team structure may differ in the FFE and in the later stages of development.
Nagahira et al. (2006) suggest that FFE planning is more complicated in the consumer goods industry than in the capital goods industry. Therefore, managers of consumer goods companies involve several members of various functional areas within their project teams and, very often, use external resources to reduce market uncertainty.
92
Molin-Juustila (2006) emphasises that the FFE, in the development of new product in the software industry, is a collaborative learning process in which:
• Representations of new products are constructed iteratively, thereby increasing the multidisciplinary knowledge of the analysed item
• There is a network of multi-functional activities (to a greater extent than a multi-functional team effort)
• The development of a new business unit can be superimposed on the most established business structure.
In cases of emerging technologies, Wheatley (1999) provides recommendations to improve the FFE:
• Emphasise early research, even if development time is increased
• Accentuate the client's voice and increase client information in both directions (client-company, company-client)
• Build strong decision-making points
• Use low-cost techniques to help evaluate the potential of technology • Use multi-functional teams
• Hire people capable of overcoming the dimensions of the FFE of uncertainty and ambiguity
• Use participatory leadership
• Ensure that teams have decision-making power
• Unify the business strategy, the product strategy and the specific product decision
93